I do not have a cake business, but I do like to make cakes. Our church has a youth group auction where they raise a lot of money for our thriving youth ministry, people donate things they've made or services etc.
I want to donate an animal cake. I've switched to making the same shape cake (2 6x2" cakes with a round top) into an animal that my sons choose for their birthday. People seem to really like them and I thought I could offer making a cake for someone and they can pick what animal.
I have about four of these in my gallery. They're just little cute cartoon type animals, nothing really fancy. We're supposed to put a value on what we're giving as an estimate for their records. What do you think it would be for something like that? It takes me about $25 for materials and about 2-3 hours to make the cake depending on what it is.
You would typically go with the fair market value, which is what someone would pay if they purchased the cake from a bakery. FMV would probably be in the $70-140 range depending on the cost of living where you are.
If you plan on using the donation as a tax deduction for yourself, you would use the FMV (assuming the direct recipient is a qualified charitable organization).